An unexpected death in the family can become a big headache if there are properties that are left unsold. If you have a relative with properties who unexpectedly died, the best thing to do about is to either divide it or get rid of it. But how do you do this? If you plan on selling it then you must know what needs to be done to execute the transaction properly.
Estate Sale: What is it?
Estate Sale or tag sales is the term used when you are selling a home after the death of a relative. It can also be interpreted in many ways like if you are not a realtor, you might think that an estate sale is something that sells furniture. But in reality, this is a sale selling a property for one of the heirs of the owner.
When it comes to selling the house of someone who has passed is in some ways similar to selling any other house. The only difference is that there are some extra considerations like dealing with the potential hassles of the estate sale so selling the property a lot easier.
Making an estate sale is challenging. Not only are you going to sell the house of a person who died but you also have to deal with the child or children of the departed. The memories made in this house can make the selling a bit difficult but often times, it’s the children who will wonder on what to do about the house. If the task of selling the house is left to you, then you need to know the best way to do it and sell it quickly. Here’s what you need to know:
8 Steps in Selling the House After the Death of a Loved One
Before you sell the house of a loved one or relative after their death, you must first know what to do about it. Here are some things you should consider:
- Transferring of real estate after the owner dies
If the estate of the person who died did not leave any will then the real estate passes this property to the direct heirs at law. They can also pass this to the beneficiaries if they left a will with it. If the departed is a single parent, the house can be equally divided to his or her children. The children or heir do not need a court to transfer the property to them as this is done directly. But what happens when the home is to be sold?
The first step is to ensure that the executor was given the authority to liquidate this real estate. Instructions are usually written and specified in the will in case the owner does decide to sell it once they have passed on. So it is important to check that the executor has the actual power for this. If they don’t have one then the beneficiaries hold the right to do whatever they want. Either they keep the property or sell it will depend on them as the beneficiaries.
Different states in the US have laws on how to sell a house as an estate whether it has a will or not. Speaking to a qualified real estate attorney is always the best step to take before making any sales. However, there are a few things you must consider too. One is that when the estate to be sold has more debts than assets then this is called insolvent. If this is the case then it is not important to pay the debts you don’t have but the state law will give you the list of priorities to follow.
- Paying the bills for the home
It is best to stay up to date with the current bills that this house has until you have finalize the home sale. This means you have to keep up with the maintenance, utilities and mortgage of the house. This is also because service providers and mortgage companies still expect to receive payment.
If the death in your family is an older parent then some companies can do a reverse mortgage. A reverse mortgage is a financial agreement where the homeowner relinquishes equity in their home in exchange of regular payments. This is done to supplement retirement income so make sure that you follow the steps when selling in this kind of circumstances. However, if you want to avoid further complications, you have to make sure that these are paid until you are sure that you no longer want their services.
- Make sure to collect the important documents related to the house
Gathering all documents could be a daunting task to do but it is also the most important part of the process. Collecting the needed financial documents is a must that are essential in the distribution of the estate. Without these documents, nothing can be accomplished. If the former owner is keen with their documents then you will find them in one place that they either kept hidden or in front of them. Among the documents you need include the following:
- A will, if there is any
- Receipts from creditors
- Insurance documents
- Investment documents
- Policy on their house as homeowner
- Statement accounts from banks
- Other personal documents or files (could be a journal, diary etc.)
Once everything is gathered the important docs, get rid of the others that has personal information written in it. Shredding would be the best way to do so, this way identify theft can be avoided and your loved one’s property is protected.
- Changing of locks and mail delivery
As the executor, you must have complete control of the property. This means you have to change all the locks or security system as well as mailing address so you can get the documents you need. Keep in mind that there will be people who will know about the death of your relative and the fact that the house is vacant. So you need to secure the place and protect whatever is left in the said property.
- Filter everything in the house
Go through all the things that your relative or family left. Make sure to check if there things that needs to go or stay. Organize the house as well and make sure it is clean once you are done with it as this will make way for the new owners. Clearing the house can be emotionally draining but it will help clear out any clutter or mess that the previous owners had before their death. If they have valuable items in the house then this can help maximize the value of the property.
- Make the house market-ready
This means that you have to take a quick evaluation of the house and do some renovations needed if necessary. This means you have to see if there are any problems with the water system, pipes, furnace, etc. You must also get rid of old furniture, strip old wallpaper and give the house a fresh makeover. Add even more life to the house by fixing or replacing old light bulbs. Replenishing the floors can also add value to the house and dressing or staging the house for potential buyers can definitely make a big difference. Of course, you don’t have to do this by yourself. Find a person who can do all the work and get the property ready in no time.
- Find and hire a top-performing real estate agent
Selling an estate should be done through a real estate agent who has experience in this kind of case. Always remember that the kind of real estate agent you pick for the job will affect the success of the sale. He or she must know how to put the right price on the property, must have an excellent marketing plan and knows where to place the property to attract buyers. They must also keep in constant communication with you so you can also monitor the progress of the sale.
- Transparency is a Must
If the estate is for sale, most interested buyers will ask if the owner died in the property or if someone has died in the house. The best approach you can do is to be honest about it. If your relative died in the house, tell the potential buyer about it. Why should you do this? This is because many buyers will find this fact creepy and might be upset if they knew about it from other people. That being said, you must be willing to divulge this to your potential buyer as early as possible. If they are okay with it, great! If not, then you can always find someone else who will be more than willing to buy the house. So make sure that your real estate agent include a disclosure on this one before selling the property.
Selling the property of a relative in the wake of their death is a trying time. In fact, they also come with tax (check the IRS guidelines in your state), so yes it is not always a fun thing to do! It is not fun to sell a house where memories were made and cherished by a loved one but I hope that you find these tips helpful, good luck on making that sale!